Mobile Operators Should Compete on Voice Not Data, Says Report
By Vanessa Clark
29 October 1999
Mobile operators should use wireless data as a way to
increase voice calls and not try to compete with fixed
operators in the data market says a new report from
U.K. analysts Schema Consulting.
The report, Opportunities for Unified Telecoms
Services: The convergence of IP, intelligent
networks and mobile technologies, sets out to advise
mobile operators on business strategies that will justify
the investments being made in wireless data
technologies. It warns operators that they will not be
able to compete with fixed operators in data alone as
technologies like xDSL and cable modems mean that
wired data rates will continue to outstrip mobile rates.
However, Schema sees new technologies like WAP as
an excellent chance for operators to drive voice
revenues, reduce churn and provide unified telecoms
services - but will only ever generate incremental
revenues themselves.
"Mobile operators are ... going to have to think about
the ways in which mobile data can complement the
services provided over the fixed network, rather than
try to compete with them head on," said Henry
Harrison, senior consultant at Schema.
Location-based services are going to be crucial here.
For example, calls made on a personal mobile phones
could be billed to a corporate account when they are
used on-site. Another service Schema suggested was
that shopkeepers could offer free phone calls from
within their stores to attract customers to special offers.
The shopkeeper would pay the operator for the calls
with the cost off-set by increased sales.
Harrison said that pure mobile data is a gamble for
operators, especially in Europe where they are being
asked to commit billions of dollars to untested
networks and technologies as part of the auctioning of
licenses. In the U.S. operators are taking a more
evolutionary approach to 3G not requiring a massive
initial investment.
Harrison warns that "expectations for mobile data are
in danger of being over-inflated because of a focus in
top speeds for new technologies." For instance, GPRS
rates, set at around 107.2 kbps, are shared by all the
users in the cell - so the more users means a slower
actual rate. And although 3G standards make the
promise of data rates at up to 2Mbps, this is only under
ideal conditions, stationary and at the middle of the cell.
It is crucial that operators manage users expectations
now to avoid this impacting the market later.
Harrison says that operators will have to set up pricing
models that charge a premium for higher rates.
"Whatever the technology, lower speeds are cheaper
and the pricing of data services has got to follow this
model," he said.
The $500 million study was conducted over the last
five months in Europe and the U.S. and consulted
operators, ISPs and vendors as well as 700 end-users |
